Ohio's Local Labor Markets

Fee, Kyle, Economic Trends

02.05.09

Since the recession started in December 2007, the U.S. economy has shed 2.5 million jobs, or 1.9 percent of nonfarm payroll employment, and Ohio has reduced its payrolls by 1.6 percent. However, not all areas of Ohio have experienced similar employment losses.

Looking at nonfarm payroll data from the Bureau of Labor Statistics for the three largest metropolitan areas in Ohio, we see that Cleveland has experienced the steepest decline in employment since the recession began (-2.1 percent). This is worse than Ohio's overall rate of decline (-1.6 percent) but is in line with the percentage change at the national level. Meanwhile, Cincinnati's and Columbus's labor markets have held up relatively well, with each metropolitan area losing less than 1 percent of its employment over the course of the current recession.

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Examining the BLS data for the state's smaller metropolitan areas, we see considerable dispersion in job losses. Akron, Canton, and Youngstown have experienced job losses of less than 1 percent, while Dayton and Toledo have experienced considerably higher losses of -1.9 percent and -3.3 percent, respectively.

The source of the differences in job losses across Ohio's metropolitan areas lies in the manufacturing sector. Job losses in this sector also account for why the declines in nonfarm payroll employment are much steeper in Cleveland, Dayton, and Toledo than other Ohio metropolitan areas. In Cleveland, Dayton, and Toledo, for example, job losses in the manufacturing sector accounted for 40 to 55 percent of the decline in employment for sectors that were contracting.

There are two possible explanations for this pattern. A negative shock to the manufacturing sector could be affecting all metropolitan areas equally, but if Cleveland, Dayton, and Toledo have higher shares of their workforces employed in manufacturing than other areas have, the shock would subtract more from the overall growth of those cities with more manufacturing employment. …

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